TMI Blog1996 (7) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year 1989-90 on October 30, 1989, which was accompanied by a statement of taxable income, showing income from various sources including income from house property. The return was accepted and an intimation under section 143(1)(a) of the Income-tax Act was sent. Subsequently, on August 2, 1991, the Assessing Officer issued a notice under section 148 of the Income-tax Act, requiring the petitioner to file the return as he had reason to believe that certain income chargeable to tax had escaped assessment within the meaning of section 147 of the Income-tax Act, inasmuch as : (a) the rent from the property owned by the assessee, R. S. Aggarwal, was kept low and for the difference in rent he was compensated by giving interest-free securities of Rs. 8 lakhs and Rs. 5,50,500 by the two companies, which fact came to light during the course of the assessment proceedings for the assessment year 1988-89, wherein the assessee had himself admitted that the correct rental income could be determined by adding 15 per cent. interest on the interest free securities received by him, and (b) the value of the perquisites provided by Hotel Banjara Ltd., one of the tenants, in the form of res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all material facts necessary for his assessment and, therefore, in the absence of this vital ingredient, a condition precedent for exercising jurisdiction under section 147(a) of the Income-tax Act, the notice under section 148 was illegal and without jurisdiction. The re-initiation of assessment proceedings by issuing notice under section 143(2) on May 1, 1992, after issue of an intimation under section 143(1)(a) of the Income-tax Act, is assailed on the ground that on submission of the return under section 148, a notice under section 143(2) was issued on October 25, 1991, before the intimation under section 143(1)(a) was sent on October 30, 1991, and, therefore, the said order, though termed as intimation, in fact was tantamount to a regular assessment under section 143(3) of the Income-tax Act. That being so, it is pleaded that the power of the Assessing Officer to issue a notice under section 143(2), with reference to the return filed on October 21, 1991, stood exhausted and, therefore, there was no question of fresh assessment proceedings being commenced by issuing a notice under section 143(2) of the Income-tax Act. On the merits, it is claimed that the information furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for his assessment for that year. As is evident from the amended section, in contradistinction to the original unamended section, requiring fulfilment of twin conditions spelt out in clause (a) of section 147 or in clause (b) of the said section, as conditions precedent for issuing notice under section 148 of the Income-tax Act, it is not so in the amended section and the only condition for action now is that the Assessing Officer should have reason to believe that income has escaped assessment which belief can be reached in any manner, and is not qualified by the precondition of full and true disclosure of material facts by an assessee, as contemplated under the old section 147(a) of the Income-tax Act. An Assessing Officer can now legitimately reopen the assessment in respect of an income which has escaped assessment. Undoubtedly, under the new section, power to reopen assessment is much wider and can be exercised even if an assessee had disclosed fully and truly all material facts. This position in law is not disputed by learned counsel for the petitioner. However, laying emphasis on the last paragraph of the reasons recorded by the Assessing Officer "that income chargeable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm the belief that income chargeable to tax has escaped assessment for the relevant assessment years. The contention, strenuously urged by Mr. Kapur, learned counsel for the petitioner, is that if ultimately after investigating the matter the Assessing Officer comes to the conclusion that there was no understatement of rental income and the assessee did not earn any income or interest from the security deposits given by the tenants, and the petitioner's stand that what was stated in the chartered accountant's letter dated February 20, 1991, in respect of the assessment year 1988-89, was only an indication of opportunity cost, is accepted, it would knock the bottom off the Assessing Officer's stated belief and the petitioner would unnecessarily be subjected to the unwarranted drill of reassessment proceedings. We are afraid there is no merit in this contention as well. As noted above, the main stand of the Assessing Officer is that the facts regarding the furnishing of interest free securities by the said two companies to the assessee to compensate him for the difference between the market rent of the property and the actual rent paid to him, came to light only during the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act is not vitiated on the ground that no income chargeable to tax has escaped assessment. The only other issue which survives for consideration is about the legality and validity of the notice issued under section 143(2) of the Income-tax Act after an intimation under section 143(1)(a) had been sent to the petitioner, The question is whether the said intimation sent to the petitioner after issuing notice under section 143(2) tantamounts to regular assessment under section 143(3), exhausting the power of the Assessing Officer to issue a fresh notice under section 143(2) for the purpose of making another assessment under section 143(3) of the Act. We feel that the controversy may not detain us for long because we have already dealt with the issue in detail in Apogee International Ltd. v. Union of India [1996] 220 ITR 248 (Delhi) (CWP Nos. 496 and 633 of 1994). In the said judgment delivered by us on March 4, 1996, after analysing the provisions of section 143(1), (2) and (3) of the Income-tax Act, we have held that an intimation to the assessee under section 143(1)(a)(i) of the Income-tax Act even after issue of notice under section 143(2), does not oust the jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
